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German brands 'overstretched' by sales volume chase
Infiniti marketing expert anticipates brand damage for prestige car companies headed downmarketAndreas Sigl, Infiniti's Global Director for Formula One, has put into words the suspicions of many Australian car enthusiasts: A-Class, 1 Series and A1 will ultimately diminish the brands marketing them.
"In Germany, as a market, [Audi, BMW and Mercedes-Benz] sell more than a million cars a year," Sigl said during a presentation at Monash University earlier this week.
"You could argue this is not really prestige, because it's not really premium anymore.
"They're talking now to... A-Class or 1 Series [buyers]; they talk to very different groups of buyers. You take a taxi, it's a Mercedes, and suddenly it's not that special anymore."
A German native who studied business in the US and worked for Intel prior to joining Audi, Sigl was recruited by Infiniti back in 2005 and now heads up the company's Formula One marketing campaign. He has been visiting Australia this week ahead of the AGP at Albert Park.
Sigl sees an inherent conflict in attracting younger buyers to the brand with more affordable prices, without cheapening the brand at the same time. A great example of this is Alfa Romeo. Once a purveyor of large luxury cars and the mount for grand prix drivers, Alfa's brand image changed irrevocably with the introduction of the affordable, front-wheel drive Alfasud in the 1970s. Judging by Sigl's comments, he sees companies like Mercedes-Benz headed down the same path.
"You have garbage trucks, you have commercial vehicles, you have cars – and then within cars you have S-Class all the way down to A-Class," he said.
"They want to get people into the brand when they're young... and just keep them and sell them through their portfolio.
"If you're a proud S-Class owner, you also want to be a little bit different."
Sigl suggests too that repositioning to chase more sales will place each of the prestige brands in conflict with a dedicated in-house brand already in that section of the market.
"If it's BMW or Audi, they all stretch really far down, and I think the risk is: 'Wait a minute, you still have a MINI brand' or Audi has a Volkswagen... and they need to fight it out in their operations."
Sigl subsequently elaborated during an interview with motoring.com.au.
"When you want to be premium, and you stretch too far down – in terms of price point – people say: 'Wait a minute, I want to be different than [others]...
But Sigl admits that there is a need for a car that will bring new, younger customers to the brand – and such cars are typically cheaper.
"The beauty of it is once you're in you can throw your entire life – from student to... empty nester – and they have something to offer any life stage, and pretty much any budget."
Such a clash of brands is already a conundrum for Nissan and Infiniti, Sigl volunteers. But the problem there is a premium product from Nissan, rather than a volume seller wearing Infiniti badges.
"There are some products where there is [conflict]... the Nissan GT-R, for instance, which is a high-performance product.
Sigl, as an employee of Infiniti, is entitled to point out what he sees as flaws in the marketing of rival companies. That is, at least, until such time as the company's own Q30 – based on the Mercedes A-Class platform – arrives in Australia.
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Written byKen Gratton
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